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Efforts to find new ways for local and central government to fund the new infrastructure required to allow new housing developments to occur are progressing after "intensive negotiations" with local government in the first few months of this year, says Prime Minister Bill English.

They appear to include greater potential for local government to enter into private-public partnerships that could see private investors take the development risk for capital-intensive roading, water and sewerage works for eventual repayment by the beneficiaries of such projects, including new residents and city authorities.

English's comments, at his weekly post-Cabinet press conference, followed comments by Finance Minister Steven Joyce at a post-Budget breakfast last Friday that further significant announcements relating to new housing were in the pipeline.

However, English said that was a reference to the $1 billion housing infrastructure fund, announced last July for use mainly by Auckland Council, but which had uncovered a lack of ready-to-build projects and an unwillingness by the Auckland body to take on substantial new debts because it is already close to limits that could affect the city's AA credit rating.

"It's been a very constructive discussion about how to expand the range of finance for councils and for central government as well as everyone getting a much better understanding of what roads and pipes are actually required to bring forward housing supply," said English. However, he would not be drawn on specifics of new mechanisms, such as PPPs or hybrid debt instruments.

"In New Zealand, we don't have much a history of doing this sort of thing outside of the mainstream PPPs, but I think it's great that it's now become publicly acceptable to look at a range of sources of finance.

"What we do know is there's plenty of finance around if you've got a transaction that makes sense to people," English said.

"Because it's relatively new I wouldn't raise too many expectations about the next few months, but the indications I've seen suggest there's been an awful learnt by both central and local government."

Legislative change could be required for Auckland Council, which had rigid debt levels although the city's debt was "actually quite low". However, that would not occur before the Sept. 23 election.

Answering questions about New Zealand's capacity to handle current levels of population growth caused, in part, by very high net migration, English appeared to practice attack lines for the forthcoming election campaign, saying he believed the ability to cope with these challenges was "going to be a key issue in the campaign".

"We believe New Zealand can adjust to be a growing economy with a growing population," he said. "Our political opponents think New Zealand isn't up to it, it's too hard and the solution is to shut down the growth by closing off international investment, getting out of international trade, closing down migration and settling for a kind of grey, low-growth mediocrity where the best thinking of the early (19)80s sets our political direction."